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Managing Recovery and Seizing Reform Opportunities

Author

Listed:
  • Della Temenggung
  • Adhi Saputro
  • Rullan Rinaldi
  • Deasy Pane

Abstract

The worst of the Covid-19-induced economic crisis appears to be behind Indonesia, with the economic contraction lessening in the second half of 2020. While the economic downturn in Indonesia has been modest compared with downturns in peer countries, Indonesia’s handling of the pandemic has been lacking. Almost a year into the pandemic, the country was still struggling with the first wave of infection as the number of new cases reported each day continued to rise. Facing criticism over the government’s handling of the pandemic, President Joko Widodo reshuffled his cabinet at the end of 2020. This Survey examines Indonesia’s plans to manage a longer-than-expected recovery from the effects of the pandemic. We see that much of the labour market is adjusting to widespread loss of employment by shifting into the agricultural sector. We also see an increase in informal employment, leading to a lower unemployment rate than expected. We argue that the pandemic has exacerbated Indonesia’s long-standing structural problems. In addition to responding to the immediate crisis issues, the government must start addressing medium-term challenges and seizing reform opportunities. We discuss the existing recovery policies, including the vaccination strategy and the omnibus law on job creation. We argue that the omnibus law alone is necessary but will not be enough to improve the investment climate and create jobs for economy recovery and long-term structural transformation.

Suggested Citation

  • Della Temenggung & Adhi Saputro & Rullan Rinaldi & Deasy Pane, 2021. "Managing Recovery and Seizing Reform Opportunities," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 57(1), pages 1-28, January.
  • Handle: RePEc:taf:bindes:v:57:y:2021:i:1:p:1-28
    DOI: 10.1080/00074918.2021.1908207
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    Cited by:

    1. Masagus M. Ridhwan & Asep Suryahadi & Jahen F. Rezki & Immanuel Satya Pekerti, 2021. "The Labor Market Impact Of Covid-19 And The Role Of E-Commerce Development: Evidence From Indonesia," Working Papers WP/10/2021, Bank Indonesia.
    2. Yesim Elhan‐Kayalar & Yasuyuki Sawada & Yana van der Meulen Rodgers, 2022. "Gender, entrepreneurship, and coping with the COVID‐19 pandemic: The case of GoFood merchants in Indonesia," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 9(3), pages 222-245, September.
    3. Gupta, Krisna & Gretton, Paul & Patunru, Arianto, 2022. "Projecting the long run impact of an economic reform: the case of the Indonesian Omnibus Law and concurrent changes in trade policy," Conference papers 333472, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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